How To Get Spanish Residency

EU residency and citizenships are among the most coveted in the world…and are not normally easy to get.

But as our own Peter MacFarlane pointed out just a few weeks ago here, several cash strapped European countries are drafting plans to make residency (and citizenship) much easier!

The inviting Spanish coastline…now more accessible than ever. photo credit

Peter reported that Ireland and Portugal have already discreetly rolled out their plans. Of the countries that are still actively working on implementing these new laws (Spain, Hungary, and Bulgaria) it appears that Spain is the closest to making a residency scheme official.

Luckily for those interested it appears that Spain’s program may be among the least expensive as well!

Needless to say we think this is very exciting news and are keeping a very close eye on the developments of each of these programs.

If you’ve ever vacationed along the captivating Mediterranean coast you’ve probably had daydreams of living there. Spanish residency is about to become easier to obtain, making this dream much easier to achieve.

As it stands, the Spanish government is considering offering residency to foreigners who buy property worth about $200,000 or more. Considering that along the sun drenched Spanish coastline many homes are selling at a steep discount (up to 50% of their original asking price!) this could be a once in a generation type of investment.

Why now?

The economically challenged PIIGS countries are starved for revenue and Spain was hit especially hard by the dramatic boom and bust housing cycle. There are an estimated 700,000 empty homes throughout Spain, filling them with money from outside the Spanish economy would be a great boon to the government and local communities.

We don’t yet know the details of this program. Some questions remain such as:

Will residency be accompanied by access to state-sponsored health-care? ( a perk to residents but a drain on the health-care system)

How long will this program be open? (Just the next few years or longer?)

Will there be tax breaks for new home buyers? (A recent program just expired but there are rumors of another being considered)

Regardless of the outcome you can bet that we will keep you updated. To make sure you are kept up to speed with the latest actionable intel from around the world be sure to sign up to our email list. Also strongly consider becoming a Q Wealth Member – for the price of a good meal you can gain access to a hidden world of information, personal consultations, and unique benefits unmatched by other services.

Advisers with expatriate clients who are tax-resident in Spain say they are urgently reaching out to their clients to warn them that they must begin reporting to the Spanish tax authorities about any overseas assets they hold worth more than €50,000, following a recent change in the country’s tax regime.

The new rules took effect yesterday, with Spanish residents with offshore holdings being expected to provide their first accounting of their non-Spanish assets between that date and 31 March 2013.

They were only published at the end of October, giving advisers and their expat clients little time to prepare, some advisers have said – particularly, they note, given the harsh penalties potentially facing those who fail to comply.

Under the new rules, failure to declare any amount worth more than €50,000 in any single asset class, or to report on any offshore entities which name the individual in question as a beneficiary, would result in a combination of a tax and fine that could not only empty out the offshore account completely, but could leave the individual owing the Spanish tax authority – La Hacienda – even more.

For example, an expat living in Spain who was discovered to have €300,000 in an undeclared offshore account would see this nest egg taxed at the top rate of 52%. But the fine for having failed to declare this would be 150% of the 52%, meaning that he would not only lose all of his savings, but he would owe the tax authority an additional €90,000, according to Vince De Stefano, managing director of Totus, which specialises in looking after expats in Spain.

In addition to the name and address of the financial institution holding their accounts, Spanish taxpayers with offshore accounts will be asked for all their relevant account numbers; the dates that their accounts were opened, closed or changed in any way; their account balances as of 31 Dec; and the average account balance in all the relevant accounts in the final quarter of the year.

Individuals are considered resident in Spain for tax purposes if they spend more than 183 days in Spain in one calendar year (or live on a boat within 12 nautical miles of Spanish land during that time); if Spain is “the centre of [their] economic activities”; and/or if their spouse and/or their dependant minor children live there, regardless of how many days the individual in question actually spends in the country.

The new rules come into force just a month after a tax amnesty ended. As reported, under that scheme, Spanish taxpayers with undeclared taxable assets were given the opportunity to declare them in return for having to pay no more than a flat 10% levy.